Pakistan Stock Exchange (PSX) sold 40% of its shares to the Chinese consortium and its results are now visible in the company. China has nominated Richard Morin, a Canadian citizen, as the Managing Director of PSX as Chinese shareholders were given the right to nominate their own candidates for the three most important positions i.e. Managing Director, Chief Regulatory Officer, and Chief Financial Officer.
However, the nomination of Morin as the MD of PSX has not gone well with the brokers who are now opposing the move by saying that the Canadian national will cost a lot to the company. According to source privy to the matter, Morin’s monthly salary has been fixed at Rs. 3 million per month and he will also be given special perks like residential and travel allowances, which in the end can become a financial burden on PSX.
Another reason for brokers and members of PSX opposing the nomination of Morin is lack of knowledge he possesses about the local market. Brokers believe that a foreign national does not understand the dynamics of the Pakistani market and is not aware of the stock market culture that can be a major barrier in the performance of PSX.
Morin himself is an experienced individual who has worked in Canadian and Mauritius stock exchanges, asset management companies, and brokerage houses.
The decision to appoint Morin as MD is not yet finalized but officials have confirmed that the board of directors has already confirmed him as the new MD. The board of PSX also has four members from China after the consortium took 40% stake in the company early this year. It is expected that official announcement will be made in the next two weeks.
PSX, for now, has received no official opposition from the brokers and members and they have the right to raise their voice at the Annual General Meeting (AGM) of the company that will take place next month. The shareholders have the right to reject and approve the appointment of the new MD but the board has the power to make the final decision.
Benchmark KSE-100 index is still in a recovery phase ever due to the instability in the political environment of the country. Addition of an MD that is not aware of the Pakistani market can further increase the problems as Morin lacks the personal relationship in the market that is necessary to keep the stock market running.